PMAA Comments On EPA Fuel Regulation Streamlining Proposal

PMAA submitted comments last week on a U.S. Environmental Protection Agency proposed rule that would streamline and reorganize the agency’s fuel regulations.

The proposed rule will result in a major reorganization of the EPA fuel regulations but with few substantive changes that would impact downstream fuel marketers.

PMAA’s comments were generally supportive of the streamlining and reorganizational changes but with a few cautionary reservations.

RFG, RVP, BOB and Neat Gasoline

PMAA supported, with reservations, the EPA’s proposal to combine existing RFG, RVP, diesel sulfur and E15 retail fuel quality surveys into one test. The change would reduce the number of retail surveys from 18,000 retail sites to just 5,000 sites nationwide according to the EPA.

However, PMAA expressed concern that the EPA is not adequately testing for fuel quality above the terminal rack, leaving retail marketers exposed to liability for off spec fuels that may originate upstream.

PMAA commented in favor of EPA’s proposal to express the summertime RFG standard for VOCs as a 7.4 RVP cap and allow for the co-mingling of conventional gasoline and wintertime RFG because it would increase downstream fungibility of the two fuels.

The EPA is also proposing to allow downstream parties to redesignate BOB when more oxygenate is added than indicated on PTDs without triggering an array of onerous regulations that typically apply to upstream parties.

PMAA supported the provision because it would clarify downstream parties’ obligations for higher blend ethanol blending.

Diesel Fuel and Heating Oil

PMAA supported the removal of obsolete regulatory language regarding ULSD sulfur warnings on PTDs and dispenser labels now that the transition to 15 ppm diesel fuel and kerosene is complete, except for locomotive and marine diesels.

 PMAA supported revision of several important heating fuel provisions that would make distillates more fungible. The EPA is proposing to simplify downstream redesignation of diesel fuel to heating oil and vice versa provided cetane and aromatic standards are met.

This change would make it easier for heating fuel dealers to use diesel fuel designated on PTDs as 15 ppm as heating oil without triggering major regulatory requirements.

Also, PMAA supported the EPA’s proposal to lift its ban against the presence of red dye in motor vehicle diesel fuel. The EPA currently requires higher sulfur distillates to be dyed red to prevent on-road use which is restricted to 15 ppm sulfur.

The EPA said the red dye ban is no longer needed now that nearly all diesel fuel and heating oil is 15ppm. PMAA supports the change because it would make distillates more fungible.

The IRS red dye requirements for nontaxable distillates is not affected by the EPA proposals.

Finalization of the streamlining proposal is expected later this year.

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